Bureau of Consumer Financial Protection

Bureau of Consumer Financial Protection (BCFP)

USA

Created under Title X (the Consumer Financial Protection Act of 2010) of the Dodd-Frank Act, the Bureau of Consumer Financial Protection (BCFP) is an independent bureau within the Federal Reserve Board (FRB) that assumes regulatory and supervisory authority over most federal consumer protection laws. In particular, the BCFP has:

• Supervisory and enforcement authority over insured depository institutions and insured credit unions with more than $10 billion in assets.

• Rulemaking, supervisory and enforcement authority over "covered persons" subject to specified exceptions. Covered person is defined as any person engaged in offering or providing a "consumer financial product or service" and any affiliate of that person that acts as a service provider to that person. A consumer financial product or service is a financial product or service that is "offered or provided for use by consumers primarily for personal, family, or household purposes" or that is "delivered, offered, or provided in connection with" the financial product or service.

Examples of a qualifying financial product or service include:

• Extending credit and servicing loans, including acquiring, purchasing, selling, brokering or other extensions of credit (other than solely extending commercial credit to a person who originates consumer credit transactions).

• Extending or brokering certain leases of personal or real property that are the functional equivalent of purchase finance arrangements.

• Providing real estate settlement services.

• Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer.

• Providing or issuing stored value or payment instruments and selling these instruments in certain circumstances.

• Providing check cashing, check collection or check guaranty services.

• Providing certain payments or other financial data processing products or services.

• Providing certain financial advisory services other than those regulated by the Securities and Exchange Commission (SEC) or state securities regulators.

• Collecting, analyzing, maintaining or providing consumer report information or other account information subject to certain exceptions.

• Collecting debt related to any consumer financial product or service.

• Any other financial product or service the BCFP may determine in certain cases.

The Dodd-Frank Act does exclude certain categories of persons from the regulatory authority of the BCFP. Some of the persons excluded include lawyers, accountants, real estate brokers and persons regulated by a state insurance regulator, a state securities commission, the SEC or the Commodity Futures Trading Commission (CFTC).

The director of the BCFP is appointed by the President, subject to the confirmation of the US Senate and is a voting member of the Financial Stability Oversight Council (FSOC).

For more information on the BCFP and the Dodd-Frank Act generally, see Articles, Summary of the Dodd-Frank Act: Regulatory Structure (www.practicallaw.com/4-502-7974) and Road Map to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. (www.practicallaw.com/3-502-8479)